Investors are often on the lookout for a good investment option that helps to cater to their short-term investment needs. A short-term investment needs could be anything for planning a family vacation, to buying a car, to paying your child’s tuition fees.
Whatever maybe your need, there are several types of investments that can be considered to cater to your investment needs. In this article we will focus on five different types of investment options that can be used to make money in the short term.
Five investment options to make money in the short run
Following are five investment options that you can consider to make money in the short term:
- Liquid funds
Liquid funds are type of mutual funds that invest assets in different money market instruments such ascertificate of deposit (CD), repos, commercial papers (CP), government securities, treasury bills (T-bills), etc. These mutual funds have an investment horizon of typically three to six months. These funds are believed to provide higher returns than most fixed deposits.
- Arbitrage funds
Not many investors are aware of this type of mutual funds. Arbitrage funds try to put an investor in anvaluable position by allowing them to make the most on the difference between the actual price and the price of a derivative of a stock. What it basically does is it purchases a particular stock and sell it at a future price of the stock. This way, it helps to also take into account the effect of inflation.
- Fixed maturity plans
Fixed maturity plans are debt funds that invest an investor’s money into various fixed-income securities such as government securities, corporate bonds, and other money market securities. The investment horizon for fixed maturity plan varies from a month to a year. An investor can choose to invest in fixed maturity plans to allow their funds to grow or to simply earn dividends on their investments.
- Treasury bills
Treasury bills are usually issued by the government of India. These investment options have a maturity tenure of up to 365 days. Note that as an investor you can choose treasury bills that have a maturity duration of 18 days or 91 days as well. These types of investments are often provided at a lesser price than their actual currency bill.
- Short-term debt funds
With ainvestment tenure of one to three years, short term debt funds are one of the highly popular low-risk investment options. However, one must note that these mutual funds can be redeemed at any time, even before their maturity tenure is finished. What’s more, doing so, an investor wont be charged of any additional fees or exit load charges. Short-term debt funds have higher potential to deliver higher returns than traditional bank fixed deposits (FD). There are different types of short-term debt funds available to investors to cater to their erratic needs.
So if you wish to cater to your short-term needs, you can invest in the above-mentioned investment options to meet your investment objectives. Just ensure that whatever type of investment you decide to go forward with aligns with your investment portfolio. Happy investing!
